Spot rate unchanged on cotton market

LAHORE: The market remained dull on Wednesday. The trading volume remained low. Cotton Analyst Naseem Usman told that the rate of cotton in Punjab and Sindh is in between Rs 18000 to Rs 21,000 per maund.

He also told that new cotton season for the year 2022-23 has partially started. New Phutti from cotton areas of lower Sindh has started reaching in cotton ginning factories. One truck of Phutti reached at Burawala cotton ginning factory and one truck of phutti reached at Tando Adam ginning factory while two ginning factories of Sangher open gates for purchase of Phutti.

The rate of new cotton crop from different areas of Sindh which includes cotton bales of Samaro were sold at Rs 9500 per maund, cotton bales of Digri and Kunri were sold in between Rs 9000-9500 per maund, bales of Kadan and Badin were sold at Rs 9500-9700 per maund, cotton bales of Mirpur Sakharo were sold at Rs 9200-9500 per maund.

ICE cotton futures pulled back on Tuesday after a near 4% jump in the previous session, on concerns over demand for the natural fiber.

Cotton contracts for July fell 2.01 cents, or 1.3%, to 148.64 cents per lb, at 1:32 p.m. ET. Prices traded within a range of 148.25 and 151.95 cents a lb.

“It’s almost a perfect pullback,” said Louis Barbera, partner and analyst at VLM Commodities Ltd, adding that some investors are taking bearish positions on the spread between the front-month July contracts and contracts further out, including the one for December delivery, given the large premium for July.

Cotton contracts further out could lose acres to wheat and corn, if the prices do not rise, Barbera said. Cotton rose about 4% on Monday driven in part by gains in the wider grains market after India banned wheat exports.

“The demand has tapered off, the price difference with China is gone, and I don’t think cotton can depend on demand to keep prices up near 150 cents,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.

Meanwhile, Chicago wheat futures firmed as worries about global supply resurfaced following an initial retreat driven by profit-taking after India said it would allow overseas wheatshipments awaiting customs clearance.

Louis Rose of Tennessee-based Rose Commodity Group said in a note that if it does not begin to rain significantly across West Texas, the market will likely move higher.

The Spot Rate remained unchanged at Rs 21000 per maund. The Polyester Fiber was available at Rs 295 per kg.

Copyright Business Recorder, 2022